Venture Capitalists at Work – Part 2

by Scott Edward Walker on July 31st, 2012

INTRODUCTION

This is part 2 of my series on Venture Capitalists at Work, which is a solid collection of interviews by Tarang Shah of certain highly-successful investors. Below are some more nuggets for entrepreneurs; and, in case you missed it, you can check out part 1 here. Cheers, Scott

“There is always a lot of psychodrama around a start-up. Suddenly, it is like, oh gee, I did not realize I had to lead people.” –Ann Winblad (p.238)

“Go see your customers. Go early on. Have really tight engagement with your customers early on and listen to them. If they say this is interesting but I want that instead, you have to move in that direction. It is really letting the market drive what you offer versus you coming up with great inventions for the customer.” –Ann Winblad (p.248)

“Start-up building is hard. There is no manual for it. We really have to be willing to fail fast and correct quickly in all of these companies. There has to be this really high level of trust between the investors and entrepreneurs. We are all rowing the same oars together. We do not win if you do not win. We all want to win really big.” –Ann Winblad (p. 252)

JIM GOETZ, Partner at Sequoia Capital

“Our view is that, early on, if you’re solving a meaningful problem, even if it’s for a small group of people, there is an opportunity to expand beyond that over time.” –Jim Goetz (p. 255)

“We talk about ‘times ten’ productivity. That’s where you assemble a small group of elite engineers and get them amped up….It happens because they’re genuinely excited to their core.” –Jim Goetz (p. 256)

ROGER LEE, General Partner at Battery Ventures

“The most difficult variable to navigate around is finding the right people. Ultimately, you cannot hire passion.” –Roger Lee (p. 260)

“[I]f the people that we back are not truly passionate about it and are not thinking about it twenty-four hours a day, someone else is.” –Roger Lee (p. 263)

“Because so many start-ups fail due to personnel issues, you effectively remove that risk if it is a team that has worked together in the past.” –Roger Lee (p. 263)

KEN HOWERY, Managing Partner at Founders Fund

“[At PayPal,] we recruited for talent, not experience….We basically tried to recruit the smartest people in our network and assumed that they would be able to figure it out.” –Ken Howery (pps. 276-277)

“[M]y best advice to entrepreneurs is to take big risks and be as ambitious as possible.” –Ken Howery (p.286)

ALFRED LIN, Partner at Sequoia Capital

“Successful entrepreneurs just keep at the problem, again and again, every single day. There were many times where Zappos looked like it could flame out.” –Alfred Lin (p. 293)

“[W]hen people become arrogant, they stop listening to their customers. They stop listening to their partners. They believe that they’ve created a rocket ship, and it will continue to be a rocket ship.” –Alfred Lin (p. 299)

“[M]any entrepreneurs don’t realize their own blind spots…because by definition you don’t see them…. You have to surround yourself with people… who will objectively help you indentify your blind spots.” –Alfred Lin (p. 299)

DAVID LEE, Founding Managing Partner at SV Angel

“[O]ne common thread among all the successful founders is fearlessness. And I don’t mean ‘fearless’ as in they are risk-takers. I mean fearless as in not being afraid to fail. Funny enough, very few people have that quality. Very few people want to take the last shot. Not being afraid to fail makes you work harder—you see the upside with no downside.” –David Lee (p. 332)

“I believe promising entrepreneurs are magnets for talent…So one question I ask when I meet a founder is, ‘would I work for him or her?’” –David Lee (p. 332)

“Every investor you add to your team should help you with mitigating…risks. If an investor doesn’t add value, don’t let them invest.” –David Lee (p. 335)

TED ALEXANDER, Managing Partner at Mission Ventures

“The mindset of the high-quality startups…is we only have so much time and we have to move quickly to build and execute and do something because many other people have it.” –Ted Alexander (p. 345)

“I think when you are focused on making the money, you sometimes miss the gaps in between that really allow you to maximize your skill sets and the area that you are really passionate about and then apply them more effectively.” –Ted Alexander (p. 351)

ALAN PATRICOF, Founder & Managing Director of Greycroft Partners

“[A]t the end of the day, people want to follow someone they believe in, whose personality is there and they have comfort that they can pull it off.” –Alan Patricof (p. 414)

“Remember, the founder has got the energy and the dedication that goes way beyond what someone who is a hired gun has, especially in the early stage of the company.” –Alan Patricof (p. 415)

RICH WONG, Partner at Accel Partners

“[I]f you are not someone that really lives the space and has built the product for yourself, oftentimes you can miss a turn on the route.” –Rich Wong (p. 438)

“It will drive entrepreneurs crazy if you as board [members] or investors are constantly bringing up issues, but the right level of paranoia keeps the pace of innovation very high.” –Rich Wong (p. 441)